Value Addition through Refinery and Petrochemical Integration

Value Addition through Refinery and Petrochemical

Integration

Delivering Excellence through People

Vineet Bakshi & Vinay Gupta Engineers India Ltd

ABSTRACTValue addition through Refinery and Petrochemical IntegrationSanjay Gupta1, Vinay Gupta2 , Vineet Bakshi3 , Manoj Kumar4

#1 Director- Commercial – Engineers India Limited, New Delhi, India. Email: [email protected] ( Project convener)

#2 Dy. Manager – Strategy & Business and Development - Engineers India Limited, New Delhi, India. Email: [email protected]((Presenting / Corresponding author)

#3 Sr. Process Engineer – Strategy & Business and Development – Engineers India Limited, New Delhi, India. Email: [email protected] (Presenting / Corresponding author)

#4 Sr. Manager – Cost Engineering - Engineers India Limited, New Delhi, India. Email: [email protected]

Given the spiralling prices of the crude oil and shrinking margins in the Refineries, it has become almost inevitable to look for value added opportunities to be integrated in the Complexes through Petrochemical integration. The fact that most of the petrochemical produces invite a higher degree of margin vis-à-vis the fuels, there is a strong case for integration between refinery and Petrochemical Complex, wherein, both feed as well as energy integration can be exploited for soliciting higher revenues. In the context of the same, a comprehensive study has been conducted at our end, wherein, an existing refinery has been integrated to a Catalytic Olefins unit to generate Ethylene, Propylene, and BTX cut for downstream Petrochemical units. Additionally, to enhance the scale of the project, a PDH Plant has been integrated with Catalytic Olefin facility to ensure world scale production facilities of Polypropylene, Acrylic Fibre, Propylene and Phenol. The BTX cut from the integrated PDH / Catalytic Olefin facility is integrated with an existing Aromatics Complex, thus leading to saving in OPEX. Opportunities are present to pinch the low value streams from the refineries as feed stock to the Catalytic Olefins Unit including integration of PFCCU off- gases for generating additional Ethylene feedstock. The MEG Plant is foreseen to completely utilize the Ethylene produce for meeting the captive requirements of an upcoming PTA / PET Complex nearby. The returns from the project are extremely attractive and have invited the attention of major oil majors and several investors in India and abroad.

mailto:[email protected]




AGENDA

Engineers India Ltd: Company Profile

Challenges for a Refiner/ Petrochem Owner

Drivers for Refinery Petrochemical Integration

Working out the Synergy: Potential Available

Premium Available for Integration

Case Study

4

AGENDA






Case Study

5

Engineers India Limited: Concept to Commissioning

Significant track record across entire Oil & Gas value chain including 10 greenfield refineries, 37 Oil & Gas

processing plants, 40 offshore process platforms, 42 pipelines and 7 petrochemical complexes

Engineers India Limited: Technology Driven Competencies

AGENDA






Case Study

8


Spiraling prices of crude oil: Low Refinery

Margin

Existing old inefficient refineries

Product quality: Ultra low sulfur, Aromatic

content, RVP, Cetane etc.

Minimization/ Elimination of Fuel oil


Surplus low value Naphtha from Refinery

Feed mix selection for cracker: Lack of

advantageously priced feedstock

Increasing Fuel & utility cost

Volatility: Cyclical margins in Petrochem

Environmental Concerns

Emerging Trends• Impact of Shale :

Falling ethylene cash cost putting Naphtha crackers under pressureC3+ material production is dropping in the regionEmergence of On purpose olefin production technologies esp. for

C3=Deficit of Aromatics to be made up by naphtha reforming and

naphtha cracking in the Middle East and Asia .

• A shift from Gas to Liquid crackers in ME. Low utility cost still advantages their position over Europe and Asian crackers

• CTO model adoption in China due to advantageously priced coal

• Residue/Petcoke Gasification for power, fuel and chemicals

• Emergence of Petro-FCCs in refineries globally

Emerging Trends

• Substantial demand & growth rate of downstream specialty petrochemicals like Acrylic Acid/ Acrylates/ Oxohols/ Ethylene Oxides/ Propylene Oxides, cumene phenol etc to support an investment in India

• Petroleum Chemicals & Petrochemical Investment region

(PCPIR)/ cluster concept

• Refiners opting for integrated aromatic complex

• Concept of petrochemical refinery

AGENDA






Case Study

13


Targeting low COP in competitive globalization era.

Premium available in olefins vis-à-vis transportation fuels

Stability over Value chain

Diversified Product slate dampens cyclic & non cyclic profitability impact (Fuels Vs Petchem)

Flexibility to dynamic market demand

Feedstock and product flexibility Assured Feedstocks Availability

Absorption of return streams

Optimal upgrading & conversion

Upgrade low value refinery streams to high value products


Capital, OPEX and Resource Optimization

Shared Infrastructure, storage & Utilities

Lower logistic & Energy cost

Minimize overhead and waste

More stringent environmental regulations impacting the operational costs

Incentives available in SEZ for promoting PCPIR/ cluster concept.

Petrochemical industry growing at much higher rate than fuel market

Essence of any Integration is to work out synergies between them in order to achieve opportunities for more profitability

Polymer consumption: A Lot to Make up

0

20

40

60

80

100

120

0 10000 20000 30000 40000 50000 60000

India China Russia Brazil USA

EU Mexico Argentina Columbia Future

Per

Cap

ita P

oly

mer

co

nsu

mp

tio

n (

kg

)

India-7kg

China-46kg

USA-90kg

India-Towards End of Decade28kg

Source: Indian Petro focus:2012GDP Per Capita (USD)

The Indian Scenario (as per FICCI, CPMA):

2007-2012, polymer growth at CAGR of 10.3%.

• PP-12%;• PE-9%;• PVC-11%

• Demand growthprojected for polymers in 2012-17: 10.3%

Global avg is 25 Kg

Strong Demand Growth in Asia & ME

Source: IHS 2014

The Indian Scenario(FICCI, industry source)

• Demand for basic petrochemicals expected to grow a CAGR of 9.3% in 2012-17

Phenol & Acrylic Acid Scenario - INDIA

source: FICCI, CII

Acrylic Acid

World scale plant of 200-250 KTPA justified

AGENDA






Case Study

19


Process Integration – integrating low value streams through innovative technologies

Utility Integration –Hydrogen, water, power, steam, nitrogen, air.

Utilization of gas fuel - Utilization of Hydrogen, HC present in

gas fuel as feedstock

Common Fractionation/ recovery sections for CAPEX savings

Refinery and Petrochemical industries are inter-related

Similar bases for Technology

Identical approaches for operation & Maintenance

Potential Process Streams for Integration Off gasses & LPG from Refinery:

Petro FCC off gases ~ 30-35% Ethylene

DCU off gases ~ 30-35% Ethane

Naphtha Stream: Predominant feedstock for crackers in South Asia, Europe and now even

ME. Off late has come under pressure due to to gas crackers.

The position of naphtha conversion to aromatics as yet seems unchallenged and is likely to remain so for the next decade

Emerging new technologies taking even cracked Naphtha and providing higher P/E ratio wrt steam crackers

BTX potential in Reformate and CR-Naphtha stream

Kerosene streams after extraction of N-paraffins

are used to produce LAB.

A complex Integrated Flowscheme

Common

Light ends

recovery

Aromatics Complex

Steam

Cracker/ olefin

unit

Petrochemical

FCC

(part of refinery)

Refinery

Fuel Oil destruction

Toulene

PX/ Mixed Xylenes

Chemicals

Gasoline

Benzene

Diesel

Kerosene

C4s

Propylene

Ethylene

Fuel Oil

Fuels

Power

Pygas

Hydrogen

NA

raffinateCracked

Naphtha

Ethane/

NGLs

DCU

off gas

Crude

Recycle to

Steam cracker

Gasoline

blend

Comp/

FG & H2

Cracked

Gases

VGO

Naphtha

if potential exists

Styrene

Reformate

A complex Integrated Flowscheme

Common

Light ends

recovery

Aromatics Complex

Steam

Cracker/ olefin

unit

Petrochemical

FCC

(part of refinery)

Refinery

Fuel Oil destruction

Toulene

PX/ Mixed Xylenes

Chemicals

Gasoline

Benzene

Diesel

Kerosene

C4s

Propylene

Ethylene

Fuel Oil

Fuels

Power

Pygas

Hydrogen

NA

raffinate

Cracked

Naptha

Ethane/

NGLs

DCU

off gas

Crude

Cracked

Gases

VGO

Naphtha

reformate

Gasoline

blend/ FG

& H2

CR. Naptha

Recycle to

Cracker

Recycles

Crude

Cracked

gases

NapthaRecycles

Py-Gas.

if potential exists

Styrene

AGENDA






Case Study

24

Premium available for Integration

0.5 1 1.5 2 2.5 3

Crude oil

Ref. Naptha

Gasoline

Ethylene

Propylene

Benzene

Toulene

PX

Styrene

Butadiene

Prices relative to Naphtha: Key Driver for Integration

Rising Delta

thus calls for

mitigation of

Naphtha

Cost penalty

marginal but

returns are

extremely

attractive

Last 1 yr came down sharply

http://www.google.co.in/url?q=http://www.dreamstime.com/royalty-free-stock-photos-3d-cartoon-man-dollar-symbol-image10572558&sa=U&ei=scZnU7zfCcPJuAT-m4Io&ved=0CEkQ9QEwDg&usg=AFQjCNEaJY4pAgBsAFxaFHRAT0TToXFdrA

Value Cracking: The way to go

C2=C3=ButadieneBenzeneToulenePX, Mixed xylene

Naptha, C9-C10 PygasPFO

C2=C3=

Naptha, Mix C4,Py gas & PFO

RealisedPrice

Value Addition Through Integration

Complex Refinery

(1)

Aromatics Integration (2)

Petrochemical Integration (3)

27

(deficit feed for Cracker is made up by import)

7

8.7

11.1

6

7

8

9

10

11

12

1 2 3

GR

M, $

/bb

l

Basis: 15 MMTPA refinery3 yr avg. prices

Integration of refinery & Petrochemicals also improve ROI significantly by ~ 4-5%.

Large Market Access & Customer Base

Opportunity ladder : step wise approach

RefiningNaphtha: $850/T

Steam CrackerC2=:$1250/T C3=: $1380/T

Aromatics

PolymerPrice: $1600/T

Butadiene: $2000-2500/ T ($1470 1 year avg)

Benzene:$1250 -1300/TToulene: $1100/TPX: $1400-1600/T

Explorationcrude: $750/ T

(3 year avg price basis, 2010-2013)

AGENDA






Case Study

30

Case Study

• Sanjay Gupta - Project convener Director- Commercial, EIL, [email protected]

• Vinay Gupta, Dy. Manager – Strategy & Business and Development – EIL, [email protected]

• Vineet Bakshi, Sr. Process Engineer – Strategy & Business and Development – EIL, [email protected]

• Manoj Kumar, Sr. Manager – Cost Engineering –EIL, [email protected]





AREA LAYOUT

Import Terminal

REFINERY

AROMATIC COMPLEX

Upcoming PTA / PET

PROPOSED PROJECT

Existing

Proposed

SEZ AREA

PROPOSED OLEFIN PROJECT- OVERVIEW

“On- Purpose Propylene” is filling the gap.

On-Purpose Propylene will supply 20% of global Propylene by 2020

• Propylene demand continues to soar.

• Recent trend of Lighter feed stocks for crackers.

• Refiners limited by flat gasoline growth

• LPG & Propane are traded as surplus, Low LPG price

• Price differential of $450 -$350/ton : C3 & C3=

Potential Opportunities:

• Opportunity in global propylene production on account of displacement of liquid feed to Crackers by natural gas, which produces less Propylene.

• Surplus LPG / Propane traded internationally – essentially from Middle East & shortly from United States

• Surplus Naphtha available in nearby refinery for value add

• Ethylene rich Refinery Off Gases (ROG) available in nearby refinery

Technologies best suited to exploit above opportunities are:

• On- Purpose Propylene

• Naphtha to Olefins conversions with higher P/E ratio (catalytic route)

POINTERS

Propylene Cost Curve

Propane Sourcing

Proposed Complex at SEZ

PROPANE

TERMINALPDH DOWNSTREAM

BLOCK

OTHERS

H2 To Refinery

PROPYLENEPROPANE FEED

CRYO RECOVERY

PROJECT OPTIONEXISTING

PROJECT ECONOMICS- Stand Alone PDH

1 2 3 4 5

IRR - 500 KTA 11% 14% 16% 19% 21%

IRR - 750 KTA 16% 18% 21% 23% 25%

0%

5%

10%

15%

20%

25%

30%

Pro

ject

IIR

-P

re T

ax

Differential Price (Propylene - Propane): 450 US$

Project IRR Trend (India)

Standalone – PDH Complex

• The Propane and Propylene price differential is a strong incentive forsetting up a PDH facility in India.

• The project economics is extremely attractive.

• Propane supplier presence in SEZ and further commitment to enhance itto the committed levels for meeting the PDH facility requirements can becontracted on a long term basis.

• Before commencement of the PDH facility, long term take off contractsfor Propylene by others would need to be in position.

• The SPV for setting up the PDH facility could review possibilities of takingup equity in the downstream units set up by others.

• Propane supplier would be encouraged to pick up equity in the PDHfacility to further bridge the risks associated with uninterrupted andreliable feedstock supply to the facility.

Stand Alone PDH- Issues

Risks

• High risk with interfaces both on feed stock & product- take off andprices.

• Standalone PDH Facility justified only when a commensurate Propylenecommitment for evacuation is in place.

• Production of non impact Polypropylene grade in India may exceeddemand in view of foreseen PP Plants

Opportunities to minimize risk via Refinery Integration

• Excess Naphtha available from refinery for Ethylene production

• With Ethylene as a product, possibility of producing impactPolypropylene etc. - demand significantly higher. Limited production asof now in India.

• MEG produced from ethylene, could be used for captive consumption inthe PTA/PET facility.

• Lesser dependency on single feedstock.

Additional Opportunities Available Via Integration

• Coker Naphtha - Low Octane, High in Olefins, unstable Di-Olefins & HighSulphur content make it unsuitable for direct blending into gasoline pool.

• Surplus Coker Naphtha, FCC Naphtha & SR Naphtha is low value & haslimited domestic market. Partly disposed as internal fuel in CPP.

• More Value Add to Naphtha through production of Petrochemicalproducts

• Refinery Off Gases (ROG) from cracking units (typ. FCC & Coker) carrypotential ethylene – can be integrated with petrochem unit for value add.

• Between Naphtha and Propylene / ethylene, a price differential of~$500/ton provides ample incentive to look for petrochemical options.

• To exploit price advantage, Refiner’s prefer to produce Propylene and BTXthan motor gasoline from their FCC units.

• MEG can be produced from ethylene in proposed complex which shall beconsumed in PTA/PET facility in SEZ , thus assured off take.

Realizing Opportunity

Naphtha to Olefins technology is available through catalytic route withfollowing features:

• Utilize most common liquid feeds available- SR & cracked naphtha

• Hydrotreated feed not required, process favorable to un-hydrotreatedfeed

• Continuous operation design

• Operates at lower temperatures than naphtha cracker

• Higher olefin yields and much higher propylene yields than cracker

• Opportunity to recover ethylene from FCC off gases.

Existing Naphtha Balance

Proposed Naphtha Balance

• Replaced Coker HN & FCC mid cut naphtha streams with highly aromatic BTX streams -leading to substantial saving in OPEX of CCR.

• Unhydrotreated Coker LN now routed Olefin instead of DHDT-savings in RefineryHydrogen consumption

Proposed Integrated Scheme

PDH UNIT (REACTION SECTION)

NAPHTHA TO OLEFINS

(REACTION SECTION)

FRAC SECTION DE PROPANIZERDEMETHANIZERDEETHANIZER

C3 / C3= SPLITTER

FRAC SECTION DE PROPANIZERDEMETHANIZERDEETHANIZER

C2 / C2= SPLITTERDEHEXANIZER

FRESH PROPANEFEED (Port)

OLEFINIC NAPHTHA(REFINERY)

PARAFFINIC NAPHTHA(REFINERY)

FCC OFF GASES (Refinery)

ETHYLENE

BTX + GASOLINE TO Arom. CPLX

COKE + ACID GAS

FUEL GAS

PROPYLENE

HYDROGENPROPANE RECYCLE

FUEL

GA

S C

ON

SUM

PTI

ON

NET FUEL GAS TO REFINERY

FG

PROPANE + PROPYLENE

FRESH PROPANEFEED (Refinery)

Benefits Of Proposed Integrated Complex

• Less dependence on propane import

• Feedstock security, higher unit run length

• Excess naphtha available at adjacent refinery

• Disposition of cracked Coker naphtha

• Easier to transport naphtha

• Co production of ethylene

• Ethylene recovery from FCC off gas

• HDT of cracked naphtha feed to Olefin unit (Catalytic) is not required thusminimizing hydrogen demand

• Valuable hydrogen is the byproduct of both units which can be utilized inrefinery

• Existing C4/C3 Storage terminal. Propane to be imported in Cryogenicstate.

• Double wall storage tanks and associated systems considered at storageterminal. Chilled Propane (@~ -40 DegC) feed to the unit.

• Propane will be first routed through the PDH chilling / separation sectionto reduce the chilling load of the unit.

• Additional chill expected from integrated common refrigeration systemand expanders in the Naphtha to Olefins unit (Demathanizer Overhead).This may eliminate Cold Box in PDH unit.

• BOG from the storage terminal to PDH unit directly as feed.

• Common Propylene splitter. significant CAPEX savings.

• Common Hydrogen recovery systems (PSA) for both units

• Common refrigeration systems

Further Optimization Opportunities

INTEGRATED BTX, NAP. TO OLEFIN, MEG & PDH COMPLEX CONFIGURATION

-650 KTPA NAPHTHA TO OLEFIN UNIT (Naphtha Feed)

-500 KTPA C3=PDH REACTION SECTION

~700 KTPA C3= COMMON FRACTIONATION SECTION

-MEG UNIT (223 KTPA C2= FF )

-BTX UNIT (583 KTPA Naphtha FF)

MEG

FEED / PRODUCT SLATE COMPARISON

NAPHTA TO OLEFINS PDH

FCC DCU

CDU

CR

N

OFF

GA

SC3+C3=

FG R

ETU

RN

AROMATIC COMPLEX

MEG P

RO

PY

LEN

E

LOSS

358

SRN

HY

DR

OG

EN

BTX

27

3

22

0

58

5

27

1 19

35

8

17

71

0

PDH

PR

OPA

NE

PR

OP

YLE

NE

HY

DR

OG

ENFU

EL92

2

55

75

0

28

PR

OPA

NE

61

5

REFINERY

STAND ALONE PDH INTEGRATED COMPLEX

Case Economic Comparison

0.6 bn US$

1.4 bn US$

20%22%

0

5

10

15

20

25

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

PDH 750 KTA, $450 Differtial Integrated PDH and Olefins Unit

%, B

efo

re T

ax

Bill

ion

US

$

CAPEX, Billion US$ (India) IRR % (BT)

DERIVATIVE COMPLEX PHASES

BTX + Olefin Unit

PDH

MEG358

SALES

ACRYLIC ACID -200

ETHYLENE

PPROPYLENE

Phase-1

Phase – 2 (BY OTHERS)

POLYPROPYLENE -440

CUMENE / PHENOL- 135 -200

710

OR

‘KTPA

Benzene

Demand 160100% Import

Demand 200 70% Import

Thank youThe information upon which this

presentation is based comes from ourown experience, knowledge anddatabases, supplemented by reference toprimary sources and published industrydata.

Any opinions expressed are those of theauthor as of this date. They have beenarrived at following careful considerationand enquiry but we do not guaranteetheir fairness , completeness or accuracy.We do not accept any liability for your

reliance upon them.

FCC: Olefin machine in the Refinery

Components Conventional yields on resid VGO feedstock –gasoline mode

Conventional yields on resid VGO feedstock – max propylene mode

Yields on hyd. VGO feedstock now available

Ethylene <1% <2% ~ 4-5%

Propylene 3% ~8% ~ <20%

C4 olefins ~6% ~8% ~ >11%

Total aromatics ~12% <15% ~ >25%

Valuable Olefins & Aromatics can be incidentally recovered if a downstream a

petrochemical & Aromatic unit exist.

Cracking Yields

BTX extracted by Sulfolane (C4H8O2S), furfural (C5H4O2), tetraethylene glycol (C8H18O5),

dimethylsulfoxide (C2H6OS), and N-methyl-2-pyrrolidone (C5H9NO)

* Values obtained at high severity and with recycling unconverted E/P Stream ! Chauvel & Lefebvre 198

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Value Addition through Refinery and Petrochemical Integration

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